Arrow Exploration (AXL) Q2 2025 earnings summary

Executive summary

• Achieved average production of 3,768 boe/d in Q2 2025, up 48% year-over-year, but down 7% sequentially due to natural declines and water cuts.

• Total oil and gas revenue net of royalties was $15.9 million, a 5% increase year-over-year.

• Net income for the first half of 2025 was $1.7 million, up from $1.2 million in the prior year period.

• Significant investments in infrastructure and drilling, including five new development wells and a 90 km² 3D seismic program.

• Entered a $20 million prepayment agreement with an integrated energy company.

Financial highlights

• Adjusted EBITDA for Q2 2025 was $6.3 million; YTD adjusted EBITDA reached $17.8 million.

• Operating cash flow YTD was $13.9 million, down from $18.9 million YTD 2024.

• Cash and cash equivalents at quarter-end were $13.2 million.

• Capital expenditures totaled $14.8 million in Q2 and $26.2 million YTD.

• Operating netback for Q2 was $27.36/boe, reflecting lower oil prices and higher water handling costs.

Outlook and guidance

• Current production is approximately 4,200 boe/d, with two more wells expected online soon.

• 2025 capital expenditure budget is $50 million, with $24 million spent in H1.

• Focus for H2 2025 is on low-risk exploration in the Tapir block, starting with Mateguafa Oeste.

• Plans to test additional prospects in 2026, including Icaco.